How to maintain progress on UK social mobility

It is two years since Theresa May stood on the steps of Downing Street and promised to fight the “burning injustices” in British society. Her government was to prioritise working class families who were “just about managing”, and it pledged to take on entrenched privilege and help people from all backgrounds “to go as far as your talents take you”.

Her speech struck home. Yet despite her bleak diagnosis, the prime minister inherited a situation in which Britain had made bigger gains in social mobility than much of the developed world. The question now is how to sustain this progress, with Brexit sapping the economy and consuming Whitehall’s energies.

Absolute social mobility — people’s chances of living better than their parents — has worsened almost everywhere since the financial crisis. But when it comes to relative social mobility — the chances of escaping a deprived background and climbing up the scale — an OECD report published last month shows that Britain has outperformed.

Between the late 1990s and the early years of this decade, the prospects of the poorest people worsened across the OECD. In the UK, they improved dramatically: at the start of the period, some six in 10 people in the bottom income quintile were still stuck there four years later but by the end this had fallen to just four in 10.

This was a triumph of policy design: the development since the 1990s of tax credits to ensure that work paid and of a minimum wage that has steadily increased.

UK success at risk as relative mobility stalls

The trouble is that it has been accompanied by growing precariousness for those slightly higher up the income scale, who are now at higher risk of sliding down to the bottom. Meanwhile, those at the very top are more likely even than before to stay there.

“If there is less absolute mobility, the losers feel much more aggrieved . . . At the bottom, a pound lost upsets wellbeing more than a pound gained increases it,” said Torsten Bell, director of the Resolution Foundation, a think-tank.

The government’s resolve to press ahead with planned welfare cuts would undo some of the country’s recent progress, he added, precisely hitting the group Mrs May promised to put first.

Although fewer people are stuck in persistent poverty, the number who transform their lives remains small. But Gavin Kelly, head of the Resolution Trust, notes that “Britain has also seen some of the biggest increases in the OECD in ‘long haul’ social mobility: those making the challenging journey from the bottom of the income scale all the way to the top”.

This is likely to be partly due to the ongoing expansion of universities — even if, as Peter Lampl, chairman of the Sutton Trust, a foundation focused on social mobility, argues: “the gains have gone disproportionately to well-off kids”.

Education is key to better life chances

Paul Gregg, an economist who served on the government’s Commission on Social Mobility, said the gap between poor and affluent children had narrowed at every stage of education, although to a lesser extent in secondary schools and higher education.

“Education is the big opportunity creator. In Britain . . . it only gets you half way,” Prof Greggs said. Graduates with exactly the same qualification earn substantially less if they come from a deprived background than if they are from affluent families, he said. The effect was especially marked for men, and in the top 25 per cent of jobs.

For those who do not stay in education, it has become even harder to get ahead.

“Graduates are pretty mobile. Non-graduates are very immobile. They are stuck. It’s costly to move or commute. Jobs for them are often through friends and networks. But the parts of Britain we’re talking about don’t have decent further education colleges. The only way of getting on is to leave,” Prof Gregg said.

This points to two priorities for policymakers.

The first is to fix the problems that continue to dog apprenticeships and to develop new vocational qualifications that can launch non graduates into good careers.

Need for more vocational training

Mr Bell said the introduction of an apprenticeship levy, and plans to introduce new technical qualifications as an alternative to A Levels, were “potentially very big game changers” despite delays and manifest problems with their implementation.

The second challenge is to effect a cultural transformation among Britain’s top employers. Sectors such as retail and industry, where executives have often worked their way up from the shop floor, are further ahead. But privately educated graduates of Oxford and Cambridge still dominate the top jobs in government, the civil service and many parts of professional services.

Yet employers are increasingly aware that they need to tackle socio-economic diversity, as well as more visible gender and ethnic imbalances, according to David Johnston, chair of the Social Mobility Foundation, a charity that supports young people from low income backgrounds.

Many are overhauling hiring practices to take candidates’ background into account, gather socio-economic data and redesign tests to predict potential.

“Employers are leading where perhaps government is not,” Mr Johnston said. “Five years ago, those questions were not being asked. Soon it will look odd if you’re not asking them.”

Big four lead the way

Since passing his A-levels, Abdul Hassan has spent much of his time marooned at home, at the mercy of the Home Office’s hostile environment immigration policy.

Born in Bangladesh, he came to London aged five and stayed to live with relatives when his father died and his mother fell ill. After turning 16, he was denied leave to remain. It took two years, during which he was unable to work or travel, to win his appeal.

But since October Mr Hassan has been arranging visas for global clients at KPMG, the accounting firm. The placement was the first in a six-year, graduate level apprenticeship that will give him a professional qualification and experience in all the firm’s main areas of practice — without student debt.

He is a beneficiary of a social mobility drive that the big accountancy firms — with their huge graduate intakes and regional presence — have been quicker to embrace than other areas of professional services.

“Back in the day, there were articles, and you could work your way up. Inadvertent barriers were created when we professionalised. We want to get rid of those barriers,” said Jenny Baskerville, who runs KPMG’s efforts to broaden its intake.

The firm now collects and publishes data on applicants’ socio-economic background. It also runs a large work experience programme from which it seeks to recruit apprentices. Others in the sector, such as PwC, are taking similar steps.

David Johnston, head of the Social Mobility Foundation, a charity, says the next challenge is to ensure that outreach translates into hiring — and that people who join from deprived backgrounds progress at the same rate as their more privileged peers.

“People who come in from less traditional backgrounds all say that it is exhausting — pretending to be someone they’re not all day, pretending to get the jokes in the meetings and pretending they do the same things in their spare time,” he said.

Mr Hassan betrays no such discomfort. With consummate tact, he says the biggest surprise at KPMG was to find senior managers sitting with the rank and file. “When you see companies on TV, everyone would have their own office.”